Ohio Real Estate Salesperson Exam — All Questions

The principle of contribution states that the value of a component or improvement is measured by:

• a.The raw number of square feet of floor area or land area that the improvement happens to occupy
• b.The owner's personal emotional attachment to and sentimental feelings about that improvement
• c.Its original construction or installation cost in every case, dollar for dollar, with no exception
• d.How much it adds to the overall value of the property, not its cost✓

Under contribution, an improvement is worth the amount it adds to the whole property's market value, which may be more or less than its cost. This principle explains why some renovations do not fully return their expense, a key point in over-improvement analysis.

Under Internal Revenue Code Section 121, a qualifying homeowner may generally EXCLUDE from taxable capital gain:

• a.Up to $250,000 of gain if single, or $500,000 if married filing jointly✓
• b.Up to a full one million dollars of gain on any property at all, at any time and any frequency
• c.All gain on any and every investment or rental property the taxpayer happens to own and sell
• d.Absolutely nothing, because gain on the sale of a home is always fully and entirely taxable

Section 121 lets homeowners who owned and used the home as their principal residence for at least two of the prior five years exclude up to $250,000 of gain (single) or $500,000 (married filing jointly). It applies to a primary residence, not to investment property.

Depreciation recapture on the sale of investment real estate means that:

• a.All of the depreciation deductions previously claimed are simply refunded to the investor in cash
• b.The investor is legally required to physically restore and rebuild the depreciated building itself
• c.Gain from prior depreciation may be taxed, often at a special rate✓
• d.No income tax is ever owed at all on the sale of a property that has previously been depreciated

When depreciated property is sold at a gain, the portion of gain due to depreciation deductions is 'recaptured' and taxed under special rules, reflecting the earlier tax benefit. It is a tax concept, not a requirement to rebuild, and it increases, not eliminates, tax on sale.

Which appraisal approach is generally MOST reliable for a special-purpose property, such as a church or public school, that rarely sells and earns no market income?

• a.The sales comparison approach, which depends on recent sales of similar comparable properties
• b.The income approach, which converts a property's market rental income into an indicated value
• c.The gross rent multiplier method, which relies on typical market rents that these lack entirely
• d.The cost approach✓

Special-purpose properties have few or no comparable sales and generate no market rent, so the cost approach (replacement cost new, less depreciation, plus land) is typically most reliable. Sales comparison lacks comparables and the income/GRM methods need market income these properties do not produce.

The four characteristics an item must have to possess value in the market, often remembered as DUST, are:

• a.Debt, Utility, Supply, and Taxes, a mix of unrelated financing and cost terms rather than value
• b.Demand, Utility, Scarcity, and Transferability✓
• c.Depreciation, Use, Sale, and Title, which describe stages of ownership rather than value itself
• d.Demand, Ownership, Scarcity, and Time, which swaps in two terms that are not part of the concept

For something to have market value it must have Demand (buyers who want it), Utility (usefulness), Scarcity (limited supply), and Transferability (the ability to convey it). The DUST acronym captures these four essentials of value.

The right of a government to take private property for public use upon payment of just compensation is called:

• a.Escheat
• b.Eminent domain✓
• c.Adverse possession
• d.Police power

Eminent domain is the government's power to take private property for a public purpose, with just compensation paid to the owner, exercised through a condemnation action. Escheat, by contrast, is the reversion of property to the state when an owner dies with no heirs.

An owner grants a neighbor the right to cross her land to reach a lake. This nonpossessory right is a(n):

• a.Easement✓
• b.Life estate
• c.Encroachment
• d.Fee simple estate

An easement is a nonpossessory right to use another's land for a specific purpose, such as access. An encroachment, by contrast, is an unauthorized intrusion of a structure onto a neighbor's property.

A building that lawfully existed before a new zoning ordinance now violates the ordinance. It may usually continue as a:

• a.Nonconforming use✓
• b.Spot zoning
• c.Special-use permit
• d.Variance

A use that was legal before a zoning change but no longer conforms is a legal nonconforming use, often allowed to continue ('grandfathered'). A variance, in contrast, is permission granted to deviate from current zoning.

A comparative market analysis (CMA) prepared by a licensee to help a seller set a listing price:

• a.Must be performed only by a licensed appraiser
• b.Is based on comparable recent sales and is not a formal appraisal✓
• c.Is the same as a formal appraisal
• d.Determines the exact loan amount

A CMA estimates likely market value from comparable recent sales to help price a listing, but it is not a formal appraisal and does not carry the same legal weight. Formal appraisals must be prepared by licensed or certified appraisers.

Loss in value due to outdated design or features that are no longer desirable is called:

• a.Functional obsolescence✓
• b.Appreciation
• c.External obsolescence
• d.Physical deterioration

Functional obsolescence is a loss in value caused by outdated design, poor layout, or features that no longer meet market expectations. External obsolescence instead results from negative influences outside the property, such as a nearby nuisance.

The process by which a lender forces the sale of a property after a borrower defaults on the mortgage is called:

• a.Foreclosure✓
• b.Novation
• c.Redemption
• d.Subordination

Foreclosure is the legal process by which a lender forces the sale of the secured property to recover the debt after the borrower defaults. Redemption, by contrast, is the borrower's right to reclaim the property by paying the debt.

A borrower assumes an existing loan and both the buyer and the original borrower remain liable unless the lender releases the seller. To fully release the seller, the lender would use a(n):

• a.Satisfaction of mortgage
• b.Estoppel certificate
• c.Novation✓
• d.Acceleration clause

A novation substitutes a new party for the original borrower and, with the lender's agreement, releases the seller from liability. Without novation, an assuming buyer takes over payments but the original borrower may remain secondarily liable.

A licensee's fiduciary duty of loyalty requires the agent to:

• a.Disclose the client's confidential information to buyers
• b.Guarantee the property will sell
• c.Follow every instruction, even illegal ones
• d.Place the client's interests above the agent's own✓

The duty of loyalty requires the agent to put the client's interests ahead of the agent's own and everyone else's. Agents must never obey illegal instructions or reveal client confidences.

Ohio requires most residential sellers to complete a Residential Property Disclosure Form that reports:

• a.The buyer's financing terms
• b.The seller's asking price justification
• c.A guarantee that the home is defect-free
• d.Known material defects and conditions of the property✓

Ohio's Residential Property Disclosure Form requires the seller to disclose known material defects and conditions based on actual knowledge. It is a disclosure of known conditions, not a warranty that the property is free of defects.

Under federal law, the lead-based paint disclosure requirement applies to residential housing built:

• a.Before 1978✓
• b.In any year
• c.Only before 1950
• d.After 1978

The federal lead-based paint disclosure rule applies to housing built before 1978, the year lead-based paint was banned for residential use. Sellers and landlords of such housing must disclose known hazards and provide an EPA pamphlet.

Time is of the essence in a contract means that:

• a.Either party may extend deadlines freely
• b.The contract expires after one year automatically
• c.Performance must occur by the stated dates or a party is in breach✓
• d.The contract has no deadline

A 'time is of the essence' clause makes the stated deadlines binding, so failing to perform on time is a breach. Without such a clause, courts may allow reasonable extensions.

Which of the following would make a real estate contract void rather than merely voidable?

• a.A minor signed it
• b.One party was under duress
• c.One party was defrauded
• d.The purpose of the contract is illegal✓

A contract for an illegal purpose is void from the outset because courts will not enforce an unlawful agreement. Contracts involving a minor, fraud, or duress are typically voidable at the option of the injured or protected party.

For a deed to transfer title, which of the following is essential?

• a.The grantee must sign the deed
• b.The deed must be notarized to be valid between the parties
• c.The deed must be recorded before it is valid between the parties
• d.The deed must be delivered to and accepted by the grantee✓

A deed transfers title when it is delivered by the grantor and accepted by the grantee; recording is for public notice, not validity between the parties. The grantor, not the grantee, signs the deed.

A licensee directs minority buyers only to certain neighborhoods and steers white buyers to others. This violation of fair housing law is called:

• a.Commingling
• b.Blockbusting
• c.Steering✓
• d.Redlining

Steering is the illegal practice of directing prospective buyers toward or away from particular neighborhoods based on a protected characteristic such as race. It limits housing choice and violates the Fair Housing Act.

A broker must place a buyer's earnest money deposit into:

• a.The broker's personal checking account
• b.A separate trust or escrow account✓
• c.The seller's bank account immediately
• d.The listing agent's own account

Earnest money and other client funds must be held in a separate trust or escrow account, never mixed with the broker's personal or operating funds. Commingling client funds is a serious violation of license law.

A property sold for $180,000, and the seller paid a 5% commission plus $2,000 in other closing costs. Ignoring the loan payoff, how much did those costs total?

• a.$11,000✓
• b.$7,000
• c.$2,900
• d.$9,000

The commission is 5% of $180,000 = $9,000, plus $2,000 in other costs, for a total of $11,000. Adding the percentage-based commission to the flat costs gives the combined figure.

A lot is 90 feet wide and 120 feet deep. What is its area in square feet?

• a.210 sq ft
• b.10,800 sq ft✓
• c.1,080 sq ft
• d.21,600 sq ft

Area of a rectangle equals width times depth: 90 x 120 = 10,800 square feet. Multiplying the two dimensions gives the lot's area.

In a condominium, an individual owner typically holds fee simple title to their unit and a shared interest in:

• a.Only the parking lot
• b.The developer's future projects
• c.The neighboring units
• d.The common elements✓

A condominium owner holds title to their individual unit plus an undivided shared interest in the common elements, such as hallways, grounds, and amenities. This shared ownership is governed by the condominium association and its documents.

Ohio real estate licensees are regulated by which body?

• a.The Ohio Attorney General's office
• b.The county auditor
• c.The Ohio Division of Real Estate and Professional Licensing✓
• d.The Ohio Association of Realtors

The Ohio Division of Real Estate and Professional Licensing, within the Department of Commerce, licenses and regulates real estate professionals. Trade associations do not issue or govern licenses.

Under Ohio license law, a salesperson's real estate license is held and their activities supervised by:

• a.The affiliated broker✓
• b.The multiple listing service
• c.The Ohio Real Estate Commission directly
• d.The salesperson personally

An Ohio salesperson must work under a broker who holds the salesperson's license and is responsible for supervising their activities and trust funds. Salespersons cannot operate independently.

Ohio law requires an 'Agency Disclosure Statement' to be provided so that:

• a.The seller can avoid disclosing defects
• b.The commission is guaranteed
• c.The parties understand which party each licensee represents✓
• d.The buyer can waive the home inspection

Ohio's Agency Disclosure Statement informs the parties which brokerage and agent represent whom in the transaction, promoting transparency about agency relationships. It must be provided at the appropriate time under Ohio agency law.

To qualify for an Ohio real estate salesperson license, an applicant must generally:

• a.Be at least 16 years old with no education
• b.Hold a license in another profession
• c.Complete required pre-license education and pass the licensing exam✓
• d.Already own a brokerage

Ohio requires salesperson applicants to complete the mandated pre-license coursework and pass the state licensing examination, in addition to meeting age and character requirements. Completing education before testing is a core prerequisite.

How many hours of prelicensure education does Ohio require of a real estate salesperson applicant?

• a.One hundred hours of approved instruction
• b.Seventy-five hours of approved instruction
• c.One hundred twenty hours of instruction✓
• d.Sixty hours of approved instruction

ORC 4735.09 requires 120 hours: 40 in real estate practice, 40 covering Ohio real estate law and municipal, state and federal civil rights law, 20 in appraisal, and 20 in finance. The 10-hour appraisal and finance figures belong to the pre-2021 version of the statute. Cite: ORC 4735.09 (10-9-2021).

How are Ohio's 120 prelicensure hours divided among the required subjects?

• a.40 practice, 40 law, 20 appraisal, 20 finance✓
• b.40 practice, 40 law, 40 appraisal, 0 finance
• c.60 practice, 30 law, 15 appraisal, 15 finance
• d.30 practice, 50 law, 20 appraisal, 20 finance

ORC 4735.09 names four courses: 40 hours real estate practice; 40 hours Ohio real estate law with civil rights law; 20 hours real estate appraisal; 20 hours real estate finance. Cite: ORC 4735.09 (10-9-2021).

What is the minimum age for an Ohio real estate salesperson licence?

• a.Twenty-one years of age at application
• b.Twenty years of age at the application
• c.Nineteen years of age at application
• d.Eighteen years of age at application✓

ORC 4735.09 requires that the applicant be at least eighteen years of age. Cite: ORC 4735.09.

What post-licensure education must a newly licensed Ohio salesperson complete, and by when?

• a.Thirty hours within twenty-four months of issue
• b.Twenty hours within twelve months of issue✓
• c.Ten hours within six months of the issue date
• d.Forty hours before the first renewal falls due

ORC 4735.09 requires 20 hours of instruction in commission-approved schools within one year of licence issuance, covering topics such as commercial real estate, property management, contract law and fiduciary responsibility. Cite: ORC 4735.09 (10-9-2021).

An Ohio salesperson does not submit the 20 hours of post-licensure education within twelve months. What happens to the licence?

• a.A fine is assessed but the licence continues
• b.The licence is placed on probationary status
• c.The licence is suspended automatically✓
• d.Nothing until the next three-year renewal

The statute provides that if the required proof is not submitted within 12 months, the licensee's licence is suspended automatically. No hearing or Commission action is needed for the suspension to take effect. Cite: ORC 4735.09 (10-9-2021).

How many hours of continuing education must an Ohio licensee complete, and how often?

• a.Thirty hours in each three-year period✓
• b.Twenty hours in each two-year period
• c.Fourteen hours in each two-year period
• d.Thirty-six hours in each four-year period

ORC 4735.141 requires 30 hours of continuing education on or before the licensee's birthday occurring three years after initial licensure, and on or before the licensee's birthday every three years after that. Cite: ORC 4735.141.

What date fixes an Ohio licensee's continuing education deadline?

• a.December 31 of every third calendar year
• b.The anniversary of the licence issue date
• c.June 30 of every third calendar year
• d.The licensee's birthday, every three years✓

Ohio ties the deadline to the licensee's birthday: the first is the birthday occurring three years after initial licensure, then every three years on that birthday. Cite: ORC 4735.141.

Within the Ohio 30-hour continuing education requirement, which three-hour courses are mandatory?

• a.Appraisal, property management, and finance
• b.Civil rights, current legislation, and canons of ethics✓
• c.Fair housing, agency law, and escrow accounting
• d.Contract law, disclosure duties, and advertising

ORC 4735.141 requires at least three classroom hours each in: current municipal, state and federal civil rights law with fair housing strategies; current state and federal legislation affecting the industry; and the canons of ethics adopted by the Ohio real estate commission under ORC 4735.18. Cite: ORC 4735.141.

Which Ohio statute sets out the canons of ethics that a mandatory continuing education course must cover?

• a.ORC 4735.09, on licence qualifications
• b.ORC 4735.141, on continuing education hours
• c.ORC 4735.18, on the canons of ethics✓
• d.ORC 4735.07, on the licence examination

The three-hour ethics course must cover the canons of ethics for the real estate industry as adopted by the Ohio real estate commission and set out in ORC 4735.18. Cite: ORC 4735.141; ORC 4735.18.

Which of the four Ohio prelicensure courses carries instruction in municipal, state and federal civil rights law?

• a.The forty-hour Ohio real estate law course✓
• b.The forty-hour real estate practice course
• c.The twenty-hour real estate finance course
• d.The twenty-hour real estate appraisal course

ORC 4735.09 folds civil rights law, housing discrimination case law, desegregation issues and methods of eliminating the effects of prior discrimination into the 40-hour Ohio real estate law course, not into the practice course. Cite: ORC 4735.09.

Ohio's real estate recovery fund is created in the state treasury. Who administers it?

• a.The Ohio Real Estate Commission's five appointed members
• b.The superintendent of real estate and professional licensing✓
• c.The treasurer of state, acting for the department of commerce
• d.The Franklin county clerk of courts, as escrow holder

ORC 4735.12(A) creates the fund in the state treasury 'to be administered by the superintendent of real estate.' The treasurer of state only credits collections and interest to it, and the commission's role is limited to setting the special assessment by rule. Cite: ORC 4735.12(A) (eff. 10/3/2023, HB 33, 135th G.A.).

What is the most the Ohio real estate recovery fund will pay out on account of any one licensee?

• a.$10,000
• b.$25,000
• c.$75,000
• d.$40,000✓

ORC 4735.12(D): 'the liability of the fund shall not exceed forty thousand dollars for any one licensee.' If valid claims exceed that, the $40,000 is divided among claimants in the ratio their claims bear to the total. Cite: ORC 4735.12(D) (eff. 10/3/2023, HB 33, 135th G.A.).

A buyer holds an unpaid judgment against an Ohio salesperson. Which part of that judgment can the recovery fund never reimburse?

• a.Punitive damages, attorney's fees and interest✓
• b.Actual and direct loss the applicant proved at trial
• c.Court costs, when the superintendent allows them
• d.Losses from a transaction only a licensee may do

ORC 4735.12(B)(2): 'Punitive damages, attorney's fees, and interest on a judgment are not recoverable from the fund.' Court costs are recoverable only in the superintendent's discretion, and the fund otherwise pays the actual and direct loss. Cite: ORC 4735.12(B)(2) (eff. 10/3/2023, HB 33, 135th G.A.).

The superintendent pays $18,000 out of the Ohio real estate recovery fund toward a judgment against a broker. What happens to that broker's licence?

• a.Nothing, unless the commission separately disciplines the broker
• b.It is permanently revoked and can never be reissued
• c.It is automatically suspended on the date of payment✓
• d.It is suspended for two months and then restored

ORC 4735.12(E): the licence 'shall be automatically suspended upon the date of payment from the fund,' and the superintendent may not reactivate it until the licensee repays the fund in full plus interest at the ORC 1343.03(A) rate. A bankruptcy discharge does not lift the suspension unless the underlying judgment was discharged and not reaffirmed. Cite: ORC 4735.12(E) (eff. 10/3/2023, HB 33, 135th G.A.).

Where does an aggrieved person file the application for payment out of the Ohio real estate recovery fund?

• a.With the Ohio Real Estate Commission at its next meeting
• b.In the court of common pleas of Franklin county✓
• c.In the common pleas court of the county where the property sits
• d.With the superintendent, who decides the claim by order

ORC 4735.12(B)(1) directs the verified application to 'the court of common pleas of Franklin county' regardless of where the property or the licensee is. The applicant must also file notice of the application with the superintendent under division (C). Cite: ORC 4735.12(B)(1) and (C) (eff. 10/3/2023, HB 33, 135th G.A.).

How is the Ohio Real Estate Commission composed?

• a.Five members: four brokers of ten years' standing and one public member✓
• b.Seven members: five brokers of ten years' standing and two of the public
• c.Nine members appointed by the superintendent of real estate
• d.Five members, every one of them a licensed Ohio broker

ORC 4735.03 seats five members appointed by the governor with the advice and consent of the senate: four must have been licensed Ohio real estate brokers for the ten years immediately preceding appointment, and one represents the public. Cite: ORC 4735.03 (eff. 10/3/2023, HB 33, 135th G.A.).

Which statement about appointments to the Ohio Real Estate Commission is correct?

• a.Four-year terms, with no political-balance requirement at all
• b.Members serve at the pleasure of the director of commerce
• c.Three-year terms, and every member must be of a different party
• d.Five-year terms; at most three members of one party✓

ORC 4735.03 sets five-year terms beginning July 1 and ending June 30, provides that 'no more than three members shall be members of any one political party,' and bars more than two consecutive full terms. Cite: ORC 4735.03 (eff. 10/3/2023, HB 33, 135th G.A.).

Who appoints Ohio's superintendent of real estate and professional licensing?

• a.The governor, with the advice and consent of the senate
• b.The Ohio Real Estate Commission, by a majority of its members
• c.The director of commerce, from a list the commission submits✓
• d.Ohio's licensed brokers, who elect the superintendent

Under ORC 4735.05 the director of commerce is ex officio executive officer of the commission and may designate a department employee as superintendent; when the office is vacant the commission and the real estate appraiser board jointly submit three qualified names within sixty days and the director appoints from those lists. Cite: ORC 4735.05 (eff. 10/3/2023, HB 33, 135th G.A.).

Instead of taking formal disciplinary action, ORC 4735.05 lets Ohio's superintendent of real estate:

• a.revoke the licence without any hearing
• b.issue an advisory letter to the licensee✓
• c.order the brokerage to pay the complainant
• d.levy a fine of up to one thousand dollars

ORC 4735.05 lists the superintendent's powers, including issuing an advisory letter in place of formal disciplinary action. Sanctions themselves are imposed by the commission after a hearing, not by the superintendent. Cite: ORC 4735.05 (eff. 10/3/2023, HB 33, 135th G.A.).

What is the largest fine the Ohio Real Estate Commission may impose for a single violation of ORC 4735.18?

• a.$2,500✓
• b.$1,000
• c.$5,000
• d.$7,500

ORC 4735.051 lets the commission impose 'a fine, not exceeding two thousand five hundred dollars per violation,' alongside or instead of revocation, suspension, a public reprimand or required coursework. Those fines are credited to the real estate recovery fund. Cite: ORC 4735.051 (eff. 11/5/2004, SB 106, 125th G.A.).

An unlicensed person is found to have acted as a real estate broker in Ohio. What civil penalty may the commission assess, and where does the money go?

• a.Up to $2,500 per violation, credited to the real estate recovery fund
• b.Up to $5,000 per violation, paid over to the consumer harmed
• c.Up to $1,000 per violation, into the real estate operating fund✓
• d.None; only a court may punish unlicensed brokerage in Ohio

ORC 4735.052(C)(4) allows a civil penalty 'in an amount it determines, not to exceed one thousand dollars per violation' for violations of ORC 4735.02, 4735.023 or 4735.25, and division (D) deposits those penalties in the real estate operating fund created by ORC 4735.211. Each day of violation is a separate violation. Cite: ORC 4735.052(C)(4) and (D) (eff. 10/3/2023, HB 33, 135th G.A.).

Under ORC 4735.18(A)(25), when must an Ohio licensee hand the parties true copies of listings and other agreements?

• a.Within three business days after signing
• b.At closing, with the settlement statement
• c.Only when a party asks for them in writing
• d.At the time each party signs them✓

ORC 4735.18(A)(25) makes it a disciplinary offence to fail 'to furnish all parties involved in a real estate transaction true copies of all listings and other agreements to which they are a party, at the time each party signs them.' Cite: ORC 4735.18(A)(25) (eff. 3/20/2026, SB 155 and SB 56, 136th G.A.).

ORC 4735.18(A)(26) requires an Ohio broker's special or trust bank account to be:

• a.noninterest-bearing, at an Ohio depository, apart from the broker's funds✓
• b.interest-bearing, with the interest credited to the recovery fund
• c.kept by the listing salesperson in that salesperson's own name
• d.at any federally chartered bank the buyer and seller pick

ORC 4735.18(A)(26) requires the broker to maintain at all times 'a special or trust bank account in a depository of a state or federally chartered institution located in this state,' and the account 'shall be noninterest-bearing, separate and distinct from any personal or other account of the broker.' Cite: ORC 4735.18(A)(26) (eff. 3/20/2026, SB 155 and SB 56, 136th G.A.).